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Can a college be a Federal Project?

TennesseeMiller ActRetainage

A GC is telling us that a college in TN is a federal project which is why the retainage amount is 10%. They did send us information for a law showing Federal projects are allowed to have up to 10%, but the way it seemed worded was only if the work was not satisfactory. So now we are trying to understand how a college is a federal project and how we find out if by them holding the 10% instead of 5%, if they are stating our work is not satisfactory. They have told us everything looks good so far.

1 reply

Jun 28, 2018
First, without knowing more, it would be hard to determine why a college project on privately owned land would be considered a federal job. Asking for documentation that shows why the job is considered a federal project might be able to help provide some clarity there. Anyway, if a job is federal, a state's retainage laws will not apply. Rather, federal rules on retainage would be adhered to. For federal jobs, retainage is allowed. Under FAR 52.232-27(d)(1), contractor may withhold payments from their sub pursuant to the contract between the parties. That is, if the contract between a GC and a sub provides for retainage, that GC can retain amounts in line with the retainage provisions of the contract. However, if the contractor will be withholding retainage, that contractor may not bill the federal government for retainage amounts that will be withheld. Finally, on federal projects, payment can be withheld for deficient work. This right exists separately from the right to withhold retainage.
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